Requesting Arbitration to apply Provisional Emergency Measures
The disputing parties have the legal right to request the Arbitral Tribunal, and the Court to apply Provisional Emergency Measures in accordance with the Law on Commercial Arbitration, and the Civil Procedures Code and relevant laws unless otherwise agreed upon by the parties. Accordingly, the Arbitral Tribunal is entitled to apply Provisional Emergency Measures at the request of one of the disputing parties.
Application of any of the following provisional emergency measures may be requested [1]:
- Prohibition of any changes to the current conditions of disputed properties;
- Prohibition of or the compelling of any disputing party to commit one or more certain acts to prevent acts that adversely affect the process of arbitral proceedings;
- Distrain disputed properties;
- Preservation, storage, sale, or disposal of any asset of one disputing party or all disputing parties;
- Request temporary monetary payments between the parties;
- Prohibit the transfer of property rights over disputed properties.
Note, requests to apply Provisional Emergency Measures are reviewed and decided upon by ‘The Arbitral Tribunal’ and not ‘The Arbitral Center’. The Arbitral Tribunal may include one or more arbitrators as agreed upon by the parties.
When to request an Arbitrator to apply Provisional Emergency Measures
The emerging needs of each party along with the urgency of the matter, immediately after filing a legal claim for arbitration, a disputing party may have a need to apply Provisional Emergency Measures. Because, the average period from the time of filing a legal claim to the time when the Arbitral Tribunal is established and decides to apply Provisional Emergency Measures is about 1 – 2 months [2].
During this period, the obligor may commit the act of the distribution of property. To prevent this act – while ensuring the conditions of judgment execution – a request to apply Provisional Emergency Measures is absolutely necessary and justifiable.
Question: HCan the disputing parties request to apply Provisional Emergency Measures without the establishment of The Arbitral Tribunal?
One or the disputing parties have the right to make an application to a court of competent jurisdiction requesting the application of one or more Provisional Emergency Measures immediately after the filing of the Lawsuit claim at the Arbitration (when the time of arbitration proceedings has begun) irrespective of whether the Arbitral Tribunal has been established or not, whether the Arbitral Tribunal has resolved the dispute or not.
Thus, the disputing party has the right to request the Court to apply Provisional Emergency Measures prior to establishing the Arbitral Tribunal, but after filing the legal claim.
Some specific situations are established relative to the timing of the request for Provisional Emergency Measures:
Scenario 1: after filing the Lawsuit claim, a disputing party has requested the Court to apply (one/several) Provisional Emergency Measures for which the Judge has not yet issued a decision on the application of Provisional Emergency Measures.
Therefore, after The Arbitral Tribunal has been established, that party or the remaining disputing party(s) may request the Arbitral Tribunal to apply Provisional Emergency Measures.
When one of the parties requests the Court to apply one or several Provisional Emergency Measures, the Court inquires of them whether or not they have requested the Arbitral Tribunal to apply one or more Provisional Emergency Measures. If they have not requested the Arbitral Tribunal to apply such measure, the Court will require them to commit, in the petition, NOT to submit the same request to other Courts or to the Arbitral Tribunal.
At the same time, the Court must examine and consider the documents accompanying the petition to make a determination on the dispute for which the parties have requested the Court or the Arbitral Tribunal to apply one or more Provisional Emergency Measures [3].
If one of the parties has requested the Court to apply one or more Provisional Emergency Measures and subsequently makes an application to the Arbitral Tribunal to apply the Provisional Emergency Measures, the Arbitral Tribunal must reject that application [4].
Scenario 2: one of the parties requests the Arbitral Tribunal to apply one/several of the Provisional Emergency Measures as previously mentioned. So, can that party and/or the disputing party(s) request the Court to apply other Provisional Emergency Measures that are not part of the previously mentioned 6 Provisional Emergency Measures?
Throughout the course of resolving a dispute, if one of the parties has requested the Arbitral tribunal to apply one or more Provisional Emergency Measures, but there is also a subsequent application to the Court to apply Provisional Emergency Measures, the Court MUST reject and return the petition, unless the request for Provisional Emergency Measures is NOT within the jurisdiction of the Arbitral tribunal [5].
If after deciding to apply Provisional Emergency Measures, the Court discovers that dispute and the parties have requested the Arbitral tribunal or the Court to apply one or more Provisional Emergency Measures, the Court will, based on the corresponding provisions, issue a decision to cancel the Provisional Emergency Measures issued by them, and at the same time, return the petition and the documents attached to the petition to the parties [6].
Procedure for applying Provisional Emergency Measure of the Arbitral Tribunal
Some Considerations:
- A security measure, when requesting a Provisional Emergency Measure, is meant to be understood as a deposit of money, precious metals, precious stones, or valuable documents secured by the Arbitral Tribunal in proportion to the value of damages that may arise as a result of improperly applying the Provisional Emergency Measures to protect the interests of the party being requested to apply the Provisional Emergency Measures. The money, precious metals, precious stones, or valuable documents are deposited into a blocked account at the bank decided by the Arbitral Tribunal.
- Although there is no specific time limit for the Arbitral tribunal to notify the requesting party of the application of the Provisional Emergency Measures on the implementation of the Security measure, based on the following provisions, it can be inferred that within 3 working days from the date of receipt of the application for the Provisional Emergency Measures, the arbitral tribunal must issue a notice/request on the implementation of the security measure(s) and send it to the requesting party.
- “Within 3 working days after receiving a request, immediately after the requestor has provided the security as specified in Clause 3 of this Article, the Arbitral tribunal will consider and decide to apply Provisional Emergency Measures.”
- The implementation of the Arbitral tribunal’s decision – on the application of Provisional Emergency Measures – must comply with the provisions of the law on enforcement of civil judgments on implementation of the court’s decision on the application of Provisional Emergency Measures. (Execute the decision to apply Provisional Emergency Measures)
Some important notes
- Firstly, the Arbitral tribunal has the authority to apply 6 Provisional Emergency Measures as specified in Article 49 of the Law on Commercial Arbitration 2010, while the Civil Procedure Code of 2015 stipulates that the Court has the authority to apply 17 Provisional Emergency Measures.
- Secondly, According to Article 53.1 in the Law on Commercial Arbitration “After filing a petition, if its lawful rights and interests are infringed or in a direct danger of infringement, the filing party has the right to make an application to a competent court to apply one or more Provisional Emergency Measures.’ without specifying that the Court will/only apply Provisional Emergency Measures under the jurisdiction of the Arbitral Tribunal (6 measures) or is entitled to apply Provisional Emergency Measures under the Civil Procedures Code.
Then, the Judges’ Council of the Supreme People’s Court issued Resolution No. 01/2014/NQ-HDTP guiding Article 53 as follows: “One of the parties may request competent Courts to request the application of one or more temporary emergency measures as specified in Clause 2, Article 49 of the Law on Commercial Arbitration, unless otherwise agreed by the parties.” Therefore:
- The resolution clearly confirmed that the parties have the right to request the Court to apply Provisional Emergency Measures under the jurisdiction of the Arbitral Tribunal in accordance with the Law on Commercial Arbitration; and
- The Resolution also expands the scope of requests and respects the agreement of the parties. This is important in determining the scope of jurisdiction as well as the Provisional Emergency Measures, that either party may request the Court to apply (when participating in arbitration proceedings). The parties may agree on the application of Provisional Emergency Measures that are outside the scope of the Law on Commercial Arbitration and, accordingly, have the right to request the Court to apply those Provisional Emergency Measures on the basis of the parties’ agreement.
In fact, there have been decisions of the Court in which the Court applied Provisional Emergency Measures provided for in the Civil Procedures Code. Specifically, once the dispute was managed by VIAC, the Plaintiff requested the Hanoi People’s Court to apply a Provisional Emergency Measure to temporarily “stop payment via L/C”. After considering the petition, the Hanoi People’s Court “applied the Provisional Emergency Measures as specified in Article 116 of the Civil Procedures Code of 2004 (amended and supplemented 2011)”, forcing the Bank for Investment and Development of Vietnam – Ha Thanh Branch to stop payment via L/C [7].
[1] Article 49, The Law on Commercial Arbitration 2010
[2] Phạm Duy Nghĩa, tlđd (Retrieved on 14/7/2022).
[3] Clause 12.5 Decree 01/2014/NQ-HDTP
[4] Clause 49.3 The Law on Commercial Arbitration 2010
[5] Clause 53.5 The Law on Commercial Arbitration 2010
[6] Clause 12.5 Decree 01/2014/NQ-HDTP
[7] Decree No 03/2013/QĐ-BPKCTT dated February 22, 2013 by Hanoi People’s Court
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